TSX: TXG February 2016 Ramping Up The ELG Mine “Gently” Getting Ready For Growth
Safe Harbour Statement THE PRELIMINARY ECONOMIC ASSESSMENT (THE “PEA”) IS A CONCEPTUAL STUDY OF THE POTENTIAL VIABILITY OF MINERAL RESOURCES OF THE MEDIA LUNA PROJECT. THE PEA IS NOT A PREFEASIBILITY STUDY OR FEASIBILITY STUDY, AS THE ECONOMICS AND TECHNICAL VIABILITY OF THE MEDIA LUNA PROJECT HAVE NOT BEEN DEMONSTRATED AT THIS TIME. IT IS PRELIMINARY IN NATURE, AND IS BASED ON INFERRED MINERAL RESOURCES THAT ARE CONSIDERED TOO SPECULATIVE GEOLOGICALLY TO HAVE THE ECONOMIC CONSIDERATIONS APPLIED TO THEM THAT WOULD ENABLE THEM TO BE CATEGORIZED AS MINERAL RESERVES, AND THERE IS NO CERTAINTY THAT THE PEA WILL BE REALIZED. MINERAL RESOURCES THAT ARE NOT MINERAL RESERVES DO NOT HAVE DEMONSTRATED ECONOMIC VIABILITY. ADDITIONAL INFORMATION ON THE MINERAL RESOURCES AND MINERAL RESERVES CONTAINED IN THIS PRESENTATION ARE INCLUDED IN THE APPENDIX – SEE SLIDES #23 and #24 This presentation contains "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking information about Torex Gold Resources Inc. (the “Company”) includes, without limitation, information with respect to proposed exploration and development activities and their timing, resource estimates and potential mineralization, the PEA, including estimates of capital and sustaining costs, anticipated internal rates of return, mine production, estimated recoveries, mine life, estimated payback period, net present values, and earnings before interest, depreciation and amortization, information with respect to the updated mine plan for the El Limón Guajes gold mine (the “ELG Mine ”), including with respect to mineral resource and mineral reserve estimates, the ability to realize estimated mineral reserves, the Company’s expectation that the ELG Mine will be profitable with positive economics from mining, recoveries, grades and annual production, receipt of all necessary approvals, the parameters and assumptions underlying the mineral resource and mineral reserve estimates and the financial analysis, gold prices, the estimated capital cost of the ELG Mine, expected date of completion, commissioning and start-up of the ELG Mine and processing facilities of the ELG Mine and expected revenues from operations and pre-production processing costs, the further advances of funds pursuant the lease financing facility (which are subject to certain customary conditions precedent), the expected timing and receipt of other sources of funds, including without limitation, value-added tax (“VAT”) refunds, the working capital estimate, successful completion of the VAT loan and the expectation that additional financing will be available on reasonable terms. Generally, forward-looking information can be identified by the use of terminology such as “plans”, “expects”, “estimates”, “intends”, “anticipates”, “believes”, “potential”, “predict” or variations of such words, or statements that certain actions, events or results “may”, “could”, “would”, “might”, “will”, “will be taken”, “occur” or “be achieved” . Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the Company’s actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including, without limitation, forward-looking statements and assumptions pertaining to the following: uncertainty as a result of the preliminary nature of the PEA and the Company’s ability to realize the results of the PEA, uncertainty regarding the inclusion of inferred mineral resources in the mineral resource estimate and the Company’s ability to upgrade the inferred mineral resources to a higher category, uncertainty regarding the ability to convert any part of the mineral resource into mineral reserves, uncertainty involving resource estimates and the ability to extract those resources economically, or at all, uncertainty involving drilling programs and the Company’s ability to expand and upgrade existing resource estimates, risks related to development, mining, future commodity prices, future processing and operating costs, availability and performance of construction contractors, suppliers and consultants, market conditions, safety and security, access to the mineral project, foreign exchange rates, actual results not being consistent with expectations or unexpected events and delays, timing and amount of production not being realized, and financial analyses being incorrect, governmental regulation, and those risk factors identified in the Company’s annual information form and management’s discussion and analysis. Forward-looking information is based on the reasonable assumptions, estimates, analysis and opinions of management made in light of its experience and perception of trends, current conditions and expected developments, and other factors that management believes are relevant and reasonable in the circumstances at the date such statements are made. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws. The scientific and technical data contained in this presentation pertaining to the Media Luna Project and the ELG Mine has been reviewed and approved by Dawson Proudfoot, P.Eng, Vice President, Engineering of the Company, other than the scientific and technical data contained in slides 5, 15, 16 and 19, which were reviewed and approved by Barton Suchomel, FAUSIMM, of Principal, Western Mining Services LLC. Mr. Proudfoot and Mr. Suchomel are Qualified Persons under National Instrument 43-101. Additional technical information is contained in the technical report entitled “Morelos Gold Property, NI 43-101 Technical Report, El Limón Guajes Mine Plan and Media Luna Preliminary Economic Assessment, Guerrero State, Mexico” dated effective August 17, 2015, and filed on September 3, 2015 (the “Technical Report”) . The technical information contained in this presentation is based upon the information contained in the Technical Report which is available on SEDAR as www.sedar.com and the Company’s website at www.torexgold.com. 2
Torex – Market Context An emerging intermediate gold producer... Mineral Resources Capital Structure 4.77M Au Oz (M&I) Market Capitalization C$1.2B 7.95M Au Eq Oz (Inferred) Fully diluted shares 809M Inclusive of Reserves of 4.1M Au Oz Debt Project Finance US$375M El Limon Guajes Mine (ELG) Average annual production 360,000 Au Oz Mine life (reserves only) 10 years Cash costs $530/Oz AISC $637/Oz As per 2015 mine plan in Technical Report subject to update in 2016. See also slides #23 and #24. ...with robust options for organic growth 3
Torex - A Clear Strategy Build the first mine on a 4.7 million oz M&I resource... The first mine, El Limon/Guajes (ELG), is now producing gold • A high grade (2.69 g/t) open pit gold mine on a 4.1M oz. reserve • Anticipate declaring Commercial Production in Q2/16 • 10 year mine life, average annual Au production – 360,000 ounces A potential second mine, Media Luna (ML), has an inferred resource of 7.4 million Au Eq. oz. • A positive PEA for ML indicates an AISC of $636/ Au Eq. oz. • This resource is 7 km from ELG, is open in all directions, and is located in a magnetic anomaly that is less than 1/3 explored ...find a second mine on the same property and build that 4
Potential For Organic Growth On The Same Property A 29,000 Ha land package that is <25% explored, and... ELG is producing ML for when the time is right ...has already delivered the ELG Mine and the ML Project 5
ELG - A Significant Annual Gold Producer Scale and grade make ELG a company building asset... ...with average annual gold production of 360,000 ounces 6
On The Path To Averaging 360k Oz. / year – FAQ’s These are the ‘ramp - up’, frequently asked questions… 1. Are you at risk of running out of money? Which means: a. Is the ‘planned build’ on budget? b. Is there any ‘unplanned build’ that is going to cost money? c. Are the pre-commercial production costs on budget? d. Can production rates match your financial model? e. What gold price is used in your financial model? f. Will VAT be returned on schedule? 2. Does the plant meet tonnage and recovery plans? 3. Does the mined grade reconcile with the geological model? …followed by questions about security and growth 7
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